[Translation] The major difference between legal tender electronic money and cryptocurrencies

The Big Difference Between Legal Tender and Cryptocurrencies

In recent times, there are various kinds of digital money, and accounts are managed through electronic technology, so many people wonder what the differences are between traditional electronically issued money by banks and permissionless cryptocurrencies like Bitcoin.

A Large Trend Toward a Cashless Society

Over the past several years, discussions about the world's progress toward a cashless society have been abundant. Furthermore, bureaucrats and government agencies around the world have advanced this idea by abolishing cash reserves and stopping the circulation of individual banknotes. Before the 1970s, cash was the mainstream form of money. Since then, most people have been conducting transactions today using electronic local currency in daily life.

For example, among the world's money, only about 8% is in paper banknotes, with everything else taking the form of electronic legal tender. Countries around the world are gradually transitioning toward a cashless society. In the United States, the habit of electronic deposits to banks became common in 1975, and after a decade or so, people were using those deposits with debit cards.

Currently, in certain countries, high-denomination notes such as $100, $500, and $1000 have become scarce because banks have halted circulation. In particular, last year in India, leaders carried out procedures to abolish currency circulation, leading to a cash crisis. In India, government agencies are strongly promoting a cashless society by replacing cash with electronic legal tender, reducing opportunities to use cash.